Warning: This tutorial requires freeware plugins: grid, mask modifier, cellular2D, terrain material and colour correct. These plugins can be obtained at many of the sites, here is one for example: http://max3d.3dluvr.com

You will also need a mesh of a ship, which you may obtain at one of the model repositories (viewpoint, 3dcafe etc.)

For all of you, advanced users of 3DSMAX, I wont bother you with a step by step detailed tutorial, therefore the quick'n'dirty procedure comes first. This tutorial also has a step by step version on how to create water, for the non advanced users, which follows after the quick'n'dirty explanation.

Quick'n'Dirty

First of all there are actually two meshes for water in this scene - the wakes one and the water surface. The mesh for wakes is smaller yet its more dense than the mesh for the water surface, because it contains more detail.

Modelling part

The two meshes are deformed with displace modifier (with cellular as a map) on which I animate the phase and the gizmo. Wakes were deformed using mask modifier, noise and xform modifier; make the modifier stack like this:

Mask Top
XForm
Noise
Mask Bottom
Editable Mesh

The mask modifier is using a map that was painted using the ship shape as a base. Sample image of the map for the modifier mask looks like this: